USDC lost its peg to the US dollar due to

USDC lost its peg to the US dollar due to the reserve held in the authorities-closed SVB bank

Stablecoin USD Coin (USDC) lost pegged to the US dollar, falling to $0.94 on the Kraken crypto exchange, its lowest price since April 2021. On Saturday, the value of USDC, the second-largest stablecoin with a market cap of $42 billion, surged to $0.984 -dollars per unit, but is still under $1, in violation of the company’s commitment to peg the stablecoin to the US dollar.

    Image source: Pixabay

Image source: Pixabay

The stablecoin’s value began to fall sharply after its issuer, Circle Internet Financial, admitted it was unable to withdraw $3.3 billion from Silicon Valley Bank (SVB), which is its USDC rate backing reserve.

On March 9, Circle attempted to withdraw its funds from SVB when it was announced that the bank would cease operations on Decision California Department of Financial Protection and Innovation (CDFPI) and adopted by the US Federal Deposit Insurance Corporation (FDIC). But two days later, on March 11th, Circle informedthat remittances have not yet been fully processed and that $3.3 billion of the USDC reserve remains in the SVB.

However, Circle has assured customers that USDC transactions will continue as normal. “Silicon Valley Bank is one of six banking partners that Circle uses to manage approximately 25% of USDC’s cash reserves. While we await clarification on how the transfer of SVB to the FDIC will affect their contributors, Circle and USDC are continuing to operate as normal.”informed company on Friday night on Twitter.

However, the crypto exchange Coinbase exposed converted USDC to US dollars over the weekend, citing banks not working these days as the reason for the decision and promising to resume the process from Monday.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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